AstraZeneca equity securities
1. American Depositary Receipt.
2. The number of ADRs in issue varies with conversion into and out of the ordinary shares.
3. The number of ordinary shares, as of 31 Dec 2017, outstanding in UK or Swedish form can vary daily as they are fungible.
What are ADRs?
ADRs are dollar-denominated equity instruments issued in the US markets through a depository bank. They represent ownership of certain equity securities (the 'underlying shares') that are issued and trade in a company's home market(s). Each ADR represents a certain number of underlying ordinary shares, but trading independently of them.
H1 2018 XBRL package
AstraZeneca’s financial information for the six months ending 30 June 2018 in XML format in line with requirements of the US Securities and Exchange Commission (SEC).
Form 20-F XBRL package 2017
AstraZeneca’s Form 20-F information in XML format in line with requirements of the US Securities and Exchange Commission (SEC).
Benefits of ADRs to investors
ADRs are a convenient and cost-effective way to buy shares in international companies.
- Stocks are quoted in US dollars
- Dividends are paid in US dollars
- ADRs trade during normal US trading hours
- They settle and clear according to US standards
- No need for custody arrangements outside of US
- Facilitates price comparisons between securities
Overview of AstraZeneca’s ADR programme
AstraZeneca has a level 2 ADR programme which is listed on NYSE under the symbol AZN. The ADR ratio is 1:2, meaning each ordinary share is represented by 2 ADRs. The programme was established in 1999 when Astra and Zeneca merged. Citi is depositary bank for the programme.
The ADR market
There are currently over 3,350 ADR programmes of which some 1,700 are sponsored. Of these, nearly 250 are listed on the New York Stock Exchange alongside AstraZeneca including some of the largest companies from Europe, Latin America and Asia Pacific.
Who buys ADRs?
ADRs are bought by both institutional and retail investors. Over $800 billion of ADRs are currently held by institutional holders.
What is the role of the depositary bank?
As depositary bank for AstraZeneca, Citi undertakes a number of functions including: Issuing and cancelling ADRs; serving as registrar and transfer agent for the ADRs; acting as paying agent, processing dividend payments or other entitlements for the ADR holders; processing corporate actions; and co-ordinating the proxy process for ADR holders.
How are AstraZeneca’s ADRs bought and sold?
ADRs can be bought and sold on the NYSE like any other security. If there is insufficient supply and/or depending on the premium/discount between the price of the ordinary shares and ADRs, ADRs can be created by Citi upon receipt of ordinary shares (as shown in the diagram). AstraZeneca’s ADRs also trade in cross-books which match ordinary shareholders looking to create ADRs with ADRs holders looking to cancel and receive ordinary shares - and vice versa. In the first half of 2017, an average of 4.8 million ADRs were traded each day. As at 30 November 2017, 440.8 million ADRs were outstanding.
How are ADRs issued and cancelled?
(1) Investor contacts broker and requests purchase of company’s ADR. If no ADRs are available, the issuance process begins.
(2) Broker contacts local broker in home market and
(3) the local broker purchases ordinary shares in the home market.
(4) Ordinary shares are deposited with a local custodian and
(5) the custodian instructs the depositary to issue ADRs which represent the shares received.
(6) The depositary issues the ADRs and delivers them in physical form or book form through DTC, Euroclear or Clearstream as applicable.
(7) The broker delivers the DRs to the investor or credits the investor’s account.